Digital Realty Trust boasts strong liquidity, 'healthy' balance sheet

By Lisa Kerner

Charlotte, N.C., May 14 - Digital Realty Trust, Inc. chief financial officer A. William Stein said the company has raised $9.7 billion since its initial public offering in 2004.

Stein made his comments during a presentation at the JMP 11th Annual Research Conference in San Francisco on Monday.

The company began with mortgage financing and then convertible debt, and then growth "really took off" when Digital Realty was able to access the unsecured bond market, Stein said.

Today, Digital Realty's debt has investment-grade ratings, and the company's liquidity has "never been better," according to Stein.

In late fall, the company closed on a new $1.5 billion global credit facility with a $750 million accordion. As of late April, $30 million had been drawn on that facility. The facility has an initial four-year term and a one-year extension.

Digital Realty subsidiaries are co-borrowers, which Stein said is very positive from both a tax and currency hedging standpoint.

Digital Realty closed on a $750 million term loan with a $100 million accordion within the last month. It has a five-year maturity.

According to Stein, Digital Realty's weighted average cost of debt is 4.75% and its debt-to-EBITDA ratio is 4.7 times. About 80% of Digital Realty's debt is fixed-rate debt.

"The balance sheet is quite healthy and is designed to withstand any shocks that may come our way," Stein said.

Digital Realty is a San Francisco-based real estate investment trust focused on data center and technology buildings.

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